Deals accounting for almost 145,000 sq ft of office space were completed in Birmingham across the first quarter of 2014, according to the latest office market report by GVA, the UK’s leading independent commercial property consultant.
Published quarterly, The Big Nine report analyses office activity in both the city centre and out of town markets in the UK’s nine largest regional cities.
All regions reported a robust start to the year, with a total of 1.16 million sq ft of transactions completed in Q1, 7% above the five-year quarterly average and continuing the upward trend seen towards the end of 2013.
Of this, Birmingham completed 144, 663 sq ft of deals, covering both the city centre and out of town markets.
While this figure remained slightly below the five-year quarterly average, there are a number of active enquiries in the market and planning consent has been granted on three high profile schemes: West Register’s 190,000 sq ft 2 Cornwall Street; M&G and Sterling’s 240,000 sq ft Lumina on Snow Hill Queensway; and Goodman’s 125,000 sq ft first phase at Eastside Locks.
George Jennings, Associate, GVA, said: “Birmingham remains an exceedingly attractive prospect for corporate occupiers, with a number of significant enquiries either currently active or forthcoming in the market.
“While the completion of these deals will absorb a good proportion of the remaining Grade A office supply, the city has a strong pipeline of schemes that have received planning consent, boosting available stock in the years to come.
“It is a very positive sign that the three schemes with consent are distributed across the city, ensuring that areas outside the traditional core, such as Eastside, are being utilised to their full potential to meet Birmingham’s growing requirement and profile as a leading destination city.”
Of all regions, Scotland experienced the strongest take-up, with both Edinburgh and Glasgow more than 50% above the five-year quarterly average. Meanwhile Manchester recorded a quarter of a million sq ft of deals, and Leeds and Bristol also both outperformed the quarterly average, each with new deals in excess of 100,000 sq ft.
The top five city centre deals in Q1 2014 were Barclays’s 80,000 sq ft deal at 4 Piccadilly Place in Manchester, Rockstar Games taking over the 75,500 sq ft Scotsman newspaper office in Edinburgh, Trader Media Group’s 60,000 sq ft deal at No1 First Street in Manchester and the Criminal Injuries Compensation Authority’s deal to take up 30,000 sq ft at Alexander Bain House in Glasgow.
Carl Potter, Director and Head of National Offices at GVA, commented: “It is great to see that, after such a strong rebound in 2013, there is little sign that the positive sentiment is set to abate. The economic conditions for growth are right, business confidence is high, and the employment market is recovering well, so it is great to see that the UK’s Big Nine cities are all thriving and continuing to push ahead.
“However, it is now clear the constraint of a real shortfall in Grade A availability will impede take up and provide a limiter on growth. This will drive rental growth across the rest of this year, and means that those investors who caught the tide of recovery early should be able to take advantage of the continuing hardening of yields.”
Office take-up in the out-of-town markets across the quarter was 651,000 sq ft, 6% above the five-year quarterly average, with Cardiff, Manchester, Bristol and Glasgow again all performing strongly above the quarterly average.